From Wednesday 31st January 2018 law enforcement have a new weapon in its armoury: Unexplained Wealth Orders (UWO). UWO will require those that hold property to explain the origin of assets. UWO can apply to any property with a value greater than £50,000.
UWO will be available to Her Majesty’s Revenue and Customs, the Financial Conduct Authority, National Crime Agency, the Director of the Serious Fraud Office, and the Director of Public Prosecutions.
UWO will require targets to provide a statement which sets out the nature and extent of their interest in a property, explain how the property was obtained, and clarify how funds were obtained to pay for the property. UWO will apply not just to individuals but also to other structures that can hold property such as trusts.
The High Court will have the power to make UWO as long as there are reasonable grounds for suspecting that the known sources of the respondent’s lawfully obtained income would have been insufficient for the purposes of enabling the respondent to obtain the property.
UWO is to be targeted at politically exposed persons and those suspected of involvement in serious crime whether in the UK or elsewhere. However, UWO is wide in scope and will affect those who have a joint interest in a property such as spouses. The new law is retrospective and applies to property no matter when it was purchased.
If a respondent fails to comply with a UWO this may result in the property becoming subject to recovery and seizure provisions. Providing false or misleading statements in response to a UWO is a criminal offence punishable by imprisonment.
Through the introduction of UWO, the UK Government is following countries including Australia and Ireland who have introduced similar instruments in their fight against money laundering. The amount of money laundered through the UK each year is estimated to be in the region of £50 billion. It remains to be seen whether the introduction of UWO will assist in the fight against money laundering or in fact, is nothing more than an unwelcome interference by the State to elicit personal financial information from individuals.